Friday, February 17, 2012

The Limits of Libertarianism

Bill

When my kids were young we had a housekeeper named Mathilde Bosun. She was the second oldest of nine from a dirt poor family in Montserrat, and she left school at the age of 12 to help her mother care for the seven behind her. She made her way to Roxbury in middle age on a temporary visa and after her island home began exploding continuously an immigration judge granted her permanent residency status. She took care of my two like they were her own and she bought a 2 Decker in Dorchester from her earnings.

Then came one of those voluntary marketplace exchanges you honor so. In 2006 a couple of parasites called mortgage brokers convinced her trade her perfectly good 30 year fixed rate mortgage for an adjustable sub prime deal. I’m sure I don’t have tell you what happened next. The house is gone. She is gone.

So I’m not quite a libertarian yet. Perfectly transparent, voluntary transactions between equals in the marketplace are a wonderful ideal, but often a fantasy. Knaves, like the vermin who brought us the subprime crisis that nearly destroyed the country are always out there. You can include Fannie and Freddie among the damned but they are a small part of what happened. So I say huzzah too. Huzzah for Dodd Frank with all its inevitable flaws. Huzzah for Richard Cordray. Huzzah for a government that cares about protecting our soldiers from the swindlers and cheats. Huzzah for balancing private and public interest .

And finally, as I have argued previously, all transactions are not equivalent. You can do without an Ipad , like the vast majority of folks who don’t have 500 bucks to spare do. Some things you can’t do without. That never makes for a free an equal transaction.

BTW you’re pretty good at setting up those straw men yourself. Dennis Kucinich? Talk about a guy who doesn’t have a clue about the way the world works. If we let idiots like him run the show we’d have an economy that runs like this: